Both titles have impressed me in their own little way, but I find that Madworld has a few OHKO enemies whilst NMH has a few OHKO Bosses...which are both a pain to get through.
Now, before I carry on, I have beaten No More Heroes and not Madworld (I am stuck on some Wolf Boss), so I may come off as a little biased.
Overall, Madworld's way of killing enemies is much more entertaining then no More Heroe's way of killing enemies, but I would say that NMH has a MUCH better way of handling boss battles.
I would also say that the missions/mini games of NMH gives it a better replay value from what I've played.
In terms of graphical style, I would say Madworld wins out for sure, the way it represents everything is much better then NMH's very linear way of forcing you to kill everything in sight until you progress.
I would, however say that NMH is better at delivering stupid puns whilst Madworld is better at the methods of killing your foes in the environment which makes for some nice eye candy.
Overall, I like both games (and I should get back to Madworld) but for now, No More Heroes wins out for the entertaining bosses you encounter in the game...Madworld's are still creative, but not as fun for me since their vulnerable status seems to be very rare to get them in whilst in NMH once you've found an opening, you can exploit it and whittle their HP down for a few seconds until they come out of that state.
Please give me your thoughts on which is better. I'd like to hear why you think that Madworld is better then NMH.
I've not played the sequel either, so I'm not going to use the "NMH is better as it has two games to its series" excuse that reviewers may do when comparing games.